Home OpinionEditorial Comment The bane of the “legal tender” in Zimbabwe

The bane of the “legal tender” in Zimbabwe

by commuadmin

The economic situation in Zimbabwe has made it difficult for Zimbabwe to access money from the banks, and even worse, the means of generating money considering the Covid-19 cloud that still hovers over informal workers.

The money problem has been breeding from almost a decade ago, mostly from monetary policies that were put in place without so much foresight put into place. Conversely, any policy that does not instill confidence in the public is as good as dead.

The transition from the Zimbabwean Dollar, to the infamous cheque (Agro and Bearer), to the USD and back to the Zimbabwean Dollar is the trace that shows the circus cycle that has been going around.

The Bond Curse

In May, the annual inflation stood at 785.55% according to the Reserve Bank of Zimbabwe.

Despite the fact that all civil servants earn the RTGS dollar, and withdraw bond notes from their banks most retailers are rejecting the bond notes with the $1 and $2 almost out of informal circulation.

Recently the police reported that they have arrested 102 business people for rejecting the Zimbabwean dollar as form of payment.

Translation equals to that the “legal tender” is not a legal tender.

However, the police warned that businesses and traders who refuse to accept “the Zimbabwe currency, bond notes and coins as legal tender in business transactions risk being arrested and taken to court for the law to take its course.”

In response, public sector union have started doing rounds of job actions demanding to be paid in for of the green back.

Nurses have been striking for almost over two weeks despite the ongoing Covid-19 pandemic and teachers have also been calling for salary payments in United States Dollars in order to curb the ever piling social discrepancies on welfare.

The economy has unofficially dollarised giving a huge advantage to those who have USD income.

Despite offers by the government to pay a USD cushioning allowance, the public sector is demanding to be paid wholly in USD as was happening in October 2018.

Reports in the local media are that the government through the Tripartite Negotiating Forum had promised to ditch the local currency if it fails to stabilize by June 2020.

If the bond notes are failing to secure good and services from providers then surely, it is hard for any general citizens to hold it as a legal tender.

Zimbabweans have found trust in the United State Dollar and the government needs to regain the trust of the people for any economic intervention to work.

The failure to separate politics from economics, transparency and accountability are some of the major factors that have been pushing the rift between government and its citizens.

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